To what end??

[feh]

This came from another thread, but it sparked a thought... forgive me, feh, for isolating your comments...

No need to apologize.

I don't think I can really add much to what others have already posted. The answer as to "why?" for me is: security and freedom.

Security: you don't know what's in store for you. You can estimate what kind of savings you'll have in 30 years, but marriage, family, change of fortune, serious injury...you just don't know what life will bring. Having money to fall back on is your insurance policy.

Freedom: if everything goes according to plan and you do have a large nest egg saved when you're 50 (or sooner!), you'll have the option of doing whatever you want with your life. Maybe you'll want to change careers, and the new one brings much less income. Maybe you'll want to go to school. Maybe you'll want to buy a yacht and sail around the world.

There's another reason I wrote my original comment, which has to do with the overt consumption displayed by many Americans these days, but that's a touchy subject and probably for another thread...

[jIM_Ohio]

Snave-
I think it depends on the "short term" item.

Groceries (which are consumed)
Music (maybe you download tunes every week or month)
Movies (because social life is important)
Stereos or electronics (because some people are like that)
other?

If you can predict what the short term expenses are, budget for them.

I love watching NFL football, so I have the NFL package on my TV. My wife likes getting her hair styled. That is in budget. We like taking vacations, that is also is budget.

If it is a one time purchase (computer) or similar, I have a 15/5 plan. 15% of gross to retirement, 5% to short term purchases. Could be a new computer, new car, new boat or trip to the casino (if you are into that kind of thing). Whatever suits you.
If I get a new PC with my 5%, it decreases what would be spent on a vacation... but we take 4-6 vacations per year, so it's not like the PC costs me my yearly vacation.

Moderation.

[kork13]

Do you have any "blow" money in your budget?

When I was younger and had my first job and had bare minimum expenses and was saving quite a bit, I felt the same way. I would save each month and then when I did want something, I felt guilty b/c I had gotten in the habit of saving a ton and then couldn't part with my money. I set up a "short-term" goal category in my budget even though I didn't know what those short goals were. I put a % or some fixed money in each month and if I didn't spend it, it just continued to add up. When I did come across something that I wanted, I could then buy it guilt free.

I do have "mad money" figured in, but right now it isn't very much (~$100/mo, which covers clothing, eating out, plus saving for bigger purchases), and I think part of what sparked this line of thought for me was that I've recently started thinking about some of the more expensive things I want to find for myself (piano, camera lenses, so on) and thought "this is gonna take forever", as I see my "short-term savings" balance going up only $30-40/mo.

thinking about some of this, I took another look at my budget this morning, and compared it to my expenses the last few months (thankfully matched up relatively well), just to reassure myself I'm going in the right direction. I think I realized that I am restricting myself a bit much right now, especially considering that I've got my finances under control really well otherwise. So I've decided that once I totally pay off my car loan in March or April, that'll be an extra $500/mo that I can move elsewhere.... I'm thinking maybe taking $300 for short-term savings, and adding an extra $200 to long term savings each month. Taking a calm look at it, I expect that you're right--once I see for certain that I have the money there, I can spend some of it guilt-free.

Thanks for your thoughts everybody, and for putting up with my little introspective rant... Putting my thoughts down and hearing what you all have had to say has actually really helped me think through it.

[LivingAlmostLarge]

when you figure it out, let me know! I'm interested in knowing.

[Ima saver]

Well I started saving at a young age. When I hit middle age, dh and I were always very comfortable. We live in a large paid for house, drive nice cars, go on cruises (I have been on 14) and eat out all the time. It is just a lot more enjoyable life not having to worry about money all the time. I am glad I started saving young and I still save.

[zetta]

I like the approach from the book All Your Worth:
needs no more than 50% of take-home pay
wants no more than 30%
savings at least 20% (ie 15% to retirement, 5% or more to other saving goals)

As long as your wants stay within that 30%, it's totally up to you on how to spend it -- clothes, vacations, electronic gadgets, nice car, etc.

At age 22, if you're able to reduce your needs below 50%, I would put the extra toward saving for your first house downpayment rather than toward more wants.